Crypto Funds Shed $1.7 Billion as Bitcoin and Ethereum ETFs Struggle
By John Nada·Feb 2, 2026·2 min read
Digital asset funds saw $1.7 billion in outflows, pushing year-to-date flows negative. U.S. redemptions dominated amid a broader market downturn.
Digital asset funds experienced significant outflows, totaling $1.7 billion last week, flipping year-to-date flows into the negative, according to Decrypt. The bulk of these redemptions came from U.S. products, while Europe saw small inflows amid a broader market downturn.
The report highlighted that this marked the second consecutive week of outflows, leaving net year-to-date flows at a global outflow of about $1 billion. U.S. redemptions accounted for $1.65 billion, with Canada and Sweden also reporting withdrawals of $37.3 million and $18.9 million, respectively. In contrast, Switzerland and Germany saw modest inflows of $11.0 million and $4.3 million.
Outflows were widespread across digital assets. Bitcoin products lost $1.32 billion, while Ethereum products faced withdrawals of $308 million. Even previously favored altcoins like XRP and Solana saw negative flows of $43.7 million and $31.7 million. However, Short-Bitcoin products managed to record $14.5 million in inflows, boosting year-to-date assets under management by 8.1%.
James Butterfill, head of research at CoinShares, suggested that these trends reflect a combination of factors, including the appointment of a more hawkish U.S. Federal Reserve Chair and continued whale selling linked to the four-year cycle. He noted that total assets under management have fallen by $73 billion since the price highs in October 2025.
The market's volatility is underscored by the recent nomination of former Federal Reserve governor Kevin Warsh to succeed Jerome Powell as chair. Warsh’s views on cryptocurrency have evolved from skepticism to a more conciliatory stance, acknowledging Bitcoin's potential. Yet, Thomas Perfumo, a global economist at Kraken, expressed that markets might be overstating how hawkish Warsh will be, emphasizing a likely continuation of rate cuts but with stabilized liquidity.
This nomination comes amid a backdrop of heightened market turbulence, further complicated by the ongoing investigation into Jeffrey Epstein, which has drawn significant public interest. Warsh's connection to this situation may distract from his approach to monetary policy, which is crucial for the crypto market’s outlook.
As the market grapples with these shifts, the implications for investors are clear: the landscape remains unpredictable. The significant outflows indicate a loss of confidence in digital asset funds, driven by broader economic concerns and regulatory developments. Investors should brace for continued volatility as the market adjusts to these ongoing changes.
Ultimately, the current climate suggests that crypto investments may face a challenging road ahead, especially if traditional financial pressures, like interest rate changes, continue to weigh heavily on the market.